A little greenback guidance

Children age 10 through 19 expanded their stake in the US economy to a record-setting $457.9 billion in 1998 - including $105.1 billion in direct expenditures and $20.9 billion in savings - according to the Rand Youth Poll, a New York-based teen-issues consultancy that has been tracking the phenomenon for 40 years.

When it comes to teaching Emily about money, they have good intentions. Often, however, the follow-through just isn't there.

"We tried to set up a plan where Emily would get a weekly allowance in return for making her bed and doing some chores, but in the crush of daily living, I just lost track of it," Ms. Brookman says. Recently, Emily wanted a Buzz Lightyear candy dispenser at a fast-food restaurant that cost about $2.

"We told her she would have to give us the money when we got home, but then we just forgot about it. We often tell her she is going to have to save up for something she wants, but then we just break down and buy it for her." Brookman says she feels some guilt about the situation. But she and her husband have resolved to be more consistent. In that, they are not alone. "It seems to me that fewer and fewer kids are getting a real allowance these days," says Irma Zandl, principal of The Zandl Group, a New York-based consultancy that advises big companies on youth issues.

"They don't have to budget themselves. When they need money, their parents just give it to them."

Research indicates many kids are clueless when it comes to money. A new nationwide survey of 12- to 17-year-olds conducted for The John Nuveen Co., a financial-services company in Chicago, found "a continuing trend of financial illiteracy among America's youth, who are the likely beneficiaries of wealth from one of the most prosperous periods in the nation's history."

Specifically, the survey found that 1 of 2 kids said they had never been taught the "facts of money" by their parents, and the same percentage said they received no financial training in school. A third keep their savings in a piggy bank rather than a financial institution, 60 percent said they don't get an allowance - validating Ms. Zandl's observation - and most displayed little understanding of financial markets.

So can anything be done about this situation? The good news is, the answer is "yes," says Neale Godfrey, the author of "Money Doesn't Grow on Trees" and a dozen other books on kids and finances.

"When children are taught about money at a young age, they grow up to be more responsible, and the younger you start, the easier it is," she says.

Ms. Godfrey advocates attacking the problem on two fronts: through parental interaction at home and with financial education programs in schools. A former banking executive and founder of The First Children's Bank, she has developed a financial education curriculum called Kid$ense for Nuveen.

"[Financial education] is beginning to happen in the schools. Companies across the country are joining with Nuveen to support the effort, but it needs to be done across the entire nation," she says.

Learning the ins and outs of what money is and how financial markets function is important, but just as important are the attitudes kids develop toward money, says Robert Kiyosaki, author of "Rich Dad, Poor Dad" (TechPress Inc.).

"Most people fail to realize that in life, it's not how much money you make, it's how much you keep that's important," he says. Mr. Kiyosaki decries the level of financial illiteracy among youths today, noting that many graduate from college without learning the dangers of misusing credit cards or how to balance a checkbook.

He says he benefited by being exposed to two attitudes toward money, that of the entrepreneurial father of a close childhood friend ("Rich Dad") and that of his biological father ("Poor Dad").

"My dad was focused on working for money, which makes it tough to ever get ahead," he says. "My 'rich dad' focused on making money work for him."

Any financial education program for kids, whether it's taught by parents or in the schools, should also touch on money's role as a philanthropic tool, says Janet Bodnar, a senior editor at Kiplinger's Personal Finance magazine and the pseudonymous author of the syndicated "Dr. Tightwad" column.

"Kids need to be taught that money is not something to be coveted or hoarded, but that it's a useful tool that is a normal part of everyday life," Ms. Bodnar says. "It can be used to help others as well as to help yourself."

The best way to impart that attitude to children is through parental example and straightforward explanations, Bodnar says.

That approach has certainly worked well with Ashley Mary Rose Werner, a six-year-old in Amsterdam, N.Y.

Over the past two years, Ashley has raised more than $400 for St. Jude Children's Research Hospital in Memphis, prompting the hospital to invite her to appear on its annual telethon last month.

She raises money by collecting loose change and forgoing gifts from relatives and friends in favor of cash donations she can add to her kitty.

There's no secret formula behind Ashley's generous nature, says her mother, Linda Werner. The Werner family regularly participates in fund-raising activities for charity and discusses them frankly with Ashley, who has absorbed those values.

"It started about two years ago, when we had a [fund-raiser] at our church for Easter. She raised $40 by herself, more than anyone else in the church," Ms. Werner says.

The St. Jude project, however, was Ashley's alone. The family received a fund-raising letter from the hospital that included a picture of a child. Ashley asked who it was, and when her mother explained that the child was sick, the little girl started saving nickels and dimes - literally.